NC budget talks extended again; agreement appears to be in reach

House and Senate negotiators said Thursday they plan to work all weekend but could not promise a budget agreement will be finalized next week.

Working after approval of a third extension to the state budget deadline, the negotiators have yet to agree on several crucial issues, including funding for teacher assistants, driver education and cost-of-living allowances for retirees.

They have agreed on $750 bonuses for state workers, wage step increases for teachers, increasing starting teacher pay to $35,000, and giving raises to State Highway Patrol, prison officers and for hard-to-fill positions.

But they also have $100 million less to work with in the education budget and $150 million less on health and human services than what the House had previously adopted. Those subcommittees are likely to take the longest to work through their differences.

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Still, Thursday ended with public claims of optimism. House negotiators and leaders called a news conference to hail the week’s progress. There was a crack of optimism in the Senate.

“The good news is we are finally on the move,” Sen. Tom Apodaca, a key Republican from Hendersonville, said on the Senate floor.

Legislators give themselves until Sept. 18 to pass a budget

Lawmakers now have until the end of the day on Sept. 18, when the third continuing resolution expires. That apparently will be just enough time.

Apodaca said he expected to see a “broad-based budget outline” early next week, and chief budget-writer Sen. Harry Brown of Jacksonville agreed. But Brown’s counterpart in the House, Rep. Nelson Dollar of Cary, wouldn’t commit to wrapping things up before mid-September, saying there are too many unresolved issues to finish over a single weekend.

The House and the Senate passed the stopgap resolution on Thursday. Senate Democrats used the floor debate to scold the Republican majority for overshooting the June 30 deadline. Gov. Pat McCrory signed the extension into law.

Sen. Dan Blue, the Democratic leader, said senators should forgo pay while the issue drags on and that negotiators should be forced to produce a recommended budget on Monday. He said schools are worried about whether they will have enough money to hire teacher assistants.

“If we put that kind of pressure on our negotiators, subcommittees or otherwise, we can get some kind of closure,” Blue said. “They know what’s in the budget. It’s just a matter of horse-trading now.”

Apodaca said he wanted to grant negotiators only one more week but agreed to the later deadline because progress was being made.

Republicans point out that the first continuing resolution provided $100 million for schools to use to handle enrollment growth, including hiring teacher assistants and offering driver education. But schools don’t know if that funding will be in the final budget.

When an agreement is finally reached, procedural requirements will slow down further progress. The House rules require the budget be available for 72 hours before a vote, so members can read it.

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The House is in a more difficult negotiating position after leading lawmakers agreed to a total spending limit of $21.7 billion. That was more than in the Senate’s adopted budget, and less than in the House version.

Dollar told reporters that the House will continue to push for across-the-board raises for employees next year. The $750 bonuses amount to less than the 2 percent the House wanted. The Senate had not budgeted for any across-the-board raises, instead pushing for a higher one-time bonus as a compromise.

$750 bonsues would be a 1.7 percent one-time raise

The bonuses would be given near the end of this year and would amount to a one-time 1.7 percent increase for the average state government employee salary of $44,114 as of Aug. 1. The bonuses would cost the state a little more than $200 million.

The bonuses and other pay adjustments, such as boosting State Highway Patrol salaries and implementing a new pay scale for prison officers, amount to $348 million in the proposed compromise. The State Health Plan would also be fully funded in both years of the budget.

Dollar said the House has agreed to one of the largest revenue adjustments in the Senate budget – the proposal to halt the transfer of $216 million from the Highway Fund to the General Fund. The Highway Fund is derived mostly from gas and diesel fuel tax collections, and it is spent mostly for road and bridge maintenance. Most of this $216 million was informally earmarked to pay for the Highway Patrol.

Dollar didn’t offer clues about what might be cut from the House budget to meet the target numbers for each subcommittee, saying only he was confident the House subcommittee chairs could prioritize goals and, if needed, House leaders could be called on to make those harder decisions.

“We will be able to fund the House’s highest priorities” within the agreed-upon limits, he said.

Rep. Linda Johnson, a Republican from Kannapolis, said House negotiators are still advocating for driver education funding, hoping to sway senators with a recent study that emphasizes the safety benefits of teaching students how to drive. “I think they’re agreeing with us on that, but it’s still early,” Johnson said.

Even as a budget agreement nears, the legislature still has outstanding issues to deal with separate from the budget: Medicaid reform, transportation and infrastructure bonds, economic incentives and a package of tax law changes.